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An In Depth Look at Google`s Potential Buyout of GoDaddy

The speculation surrounding Google’s potential purchase of GoDaddy reached its pinnacle back in September, and has since waned somewhat. Because there hasn’t been any news recently to either confirm or dispel what so many people have been anticipating, I figured that I would take an in depth look into exactly what is being considered and how its possible transpiration will affect the SEO and web hosting fields.

First of all, to doubt for any reason that Google might purchase GoDaddy would demonstrate complete and utter naivety. In 2007 alone, Google has made at least one full or partial acquisition per month, aside from the month of August. Most notable among these acquisitions are the communications security firm Postini for $625 million and the pending acquisition of the online advertising company DoubleClick for $3.1 billion!

I say pending because U.S. lawmakers have said they will look into the antitrust implications of the deal. Once again, those damn regulators keep trying to bully large companies from achieving “monopoly” status. I for one would welcome Google as our Internet overlords. As an ignorant peon I’d have no problem rounding up others like me to toil in their underground caves … but more on that later.

The only reason I can think of that might hinder Google’s potential buyout of GoDaddy would be the hard hit they might take to their reputation. GoDaddy is known by most non-tech savvy people as the company that makes those racy Superbowl commercials and Google may not want to associate themselves with that kind of lowbrow advertising. However, this excuse is tenuous at best. For Google, a progressive company interested in a young, hip market, to worry about the moralistic opinions of people who probably don’t even know what GoDaddy does would be ludicrous. Why would a company that purchased the raunchy paradise that is YouTube be worried about some chick with a flimsy tank top?

The rest of this article will examine the intricacies of the Google/GoDaddy collaboration, including what caused the experts to surmise such a deal and the fallout to be generated if it were to occur. This article will benefit the novice and hopefully provide new information to those already familiar with the possible deal.

{mospagebreak title=The Deal}

Bloggers are a lot like detectives, they pick up several bits of information left behind by the perpetrator and try to piece them together and form a theory. This theory will be used on the suspect(s) and they in turn will be examined in terms of the evidence to decide whether or not they are guilty. In this specific case, the suspect is Google. The theory: they are planning to acquire GoDaddy via buyout. Now it is up to them to either confess or be subjected to the judgments of a jury of their peers — that’s you. Look, here comes the lawyer with the first piece of evidence.

Over three years ago, Google successfully made their bid to become an authorized registrar, placing them in direct competition with GoDaddy. It begins! For those of you unfamiliar with what this means, a registrar is a company with the authority to register Internet domain names. Most are accredited by the Internet Corporation for Assigned Names and Numbers (ICANN), which have control over Generic Top Level Domains (gTLDs), like .com, .org, and .net. Since the turn of the century, hundreds of registrars have entered the domain name registration market, with GoDaddy leading the pack. Google shrugged off the allegations of confrontation with the registrar veterans and said they were only trying to better understand what their offering potential was for their Google Apps endeavor.

What they came to understand was that cooperation is much more productive than confrontation, not to mention more civil. They ended up teaming up with the top two registrars, GoDaddy and Enom, to sell domain names for a $10 per year subscription in a Google Apps for Your Domain package. Turn on your speculators. According to eweek.com, GoDaddy has also recently been filing for several related patents, like search, VoIP, email, and domain technologies, that would further interest Google in the company.

Andrew Allemann, editor of the Domain Name Wire blog, says, “Google would get its hands on reams of data about the very domain names it is indexing, as well as acquire its patent portfolio.” In addition, Allemann says GoDaddy “likely” uses Google for an advertising feed when it parks its customers’ pages. Parking simply means that GoDaddy and Internet advertisers will use an underdeveloped domain name and resolve it to a page with advertising geared toward its visitors. “[Google] could lock down that advertising base there, and keep GoDaddy from switching to Yahoo or something like that,” he says. So far, this sounds like a no-brainer for Google.

As of right now (when this article was written) the Google/GoDaddy partnership remains mostly focused on Google Apps for Your Domain. Aside from figuring out a way to consolidate their email application offer with Google’s Gmail, GoDaddy is offering other useful tools, such as website formation tools, chat applications, and e-commerce tools. It hasn’t even been a year since these two teamed up, and things seem to be going quite nicely. But there are other things, like domain expiration information controlled by the registrars, that tie in to Google’s desire to keep up with and/or surpass Microsoft in the applications market. Of course, Google will probably spout the typical cliché about cleaning up their search engine product for a better user experience.

{mospagebreak title=The Effect}

Now for the million dollar question: what if a purchase actually happens? The main concern people have with this deal is how it will affect a publisher’s ability to make a living online. Being the Internet’s biggest search engine means that they have the lion’s share of the search traffic. They also control the largest ad network on the web, so a publisher could easily find themselves in hot water if they end up on Google’s bad side, however that might happen. And as a result of the deal, Google would reign over more domains than any other company, leaving any publisher who chose to buy their domains from another registrar at a disadvantage to those who decided to use GoDaddy — assuming Google decided in some way to favor those who’d bought from GoDaddy. As you can see, we’re teetering on the edge of a complete monopoly, but hey, that’s capitalism, you bend the rules as far as they’ll go without breaking.

That is the bad news, depending on where you’re coming from. As for the good news, we will return to the deal’s effect on search engine optimization. Simply put, many are hoping that this deal will do great things in terms of removing spam from search engine results; after all, that’s what Google is all about. An example of those that will be affected by this are the black hat SEOs.

“What the hell is that?” you ask. Well, a general definition of a black hat SEO would be using any, and I mean any, technique whatsoever to maximize search rankings, usually in violation of search engine rules and regulations. Not only that, but the sites themselves will take a hit in terms of quality because their designers opted instead to take the nefarious path toward temporary high search engine rankings. Black hat SEO involves techniques like keyword stuffing (stuffing your site with long lists of nothing but keywords), invisible text (putting keywords in the same color text as the background), and doorway pages (a fake page used only to attract search engine spiders). Using any of these techniques will most likely get your site banned from search engines.

As you may have guessed, there are those that do use black hat SEO techniques who are extremely worried about the possible Google/GoDaddy convergence. Google would all of a sudden have the ability to look at all of the registration details for GoDaddy’s clients. Earlier in the article, I mentioned briefly that Google would also gain domain expiration information, giving them the ability to detect a switch in domain ownership in real time. This could be bad news for those who possess an expired domain that still enjoys a high PageRank. I’m guessing this won’t stop them though. The Internet is so vast that they’ll probably find some way to hide their tracks.

{mospagebreak title=Conclusion}

One reason I like conclusions is because they allow me to digress a little bit. But sticking to the topic of a highly conceivable Google buyout of GoDaddy, I think it’s pretty clear that the reasons are piling up in favor of Google’s purchase. And with Google’s track record of nearly 50 prior acquisitions, more reasons hardly seem necessary.

So what’s in it for GoDaddy (aside from truckloads of money)? Well, I already mentioned the growing partnership between themselves and Google, so combining both companies would seem like the next logical step in terms of streamlining company efficiency. Google might also be able to help with what has become a growing call for them to redesign their sites, specifically to make their checkout process more coherent. But this is an entirely different transgression. I assume, if this deal is in the works, there are great plans being drawn up that we don’t even know about.

I mentioned earlier that I would return to the subject of monopolies. We all have separate opinions on how big business should be regulated. Mine happens to be: the more the better. Some will call this undemocratic. How can you have a free market with regulators hovering over your shoulder all the time?

Personally, I think capitalism has very little to do with democracy. Democracy is about equality, whereas capitalism inherently promotes profit at all costs. With a company like Google getting stronger and stronger, what happens to the little guy? This can be a concern, but the good thing about the Internet is that it is constantly growing, constantly creating new ways for innovative people to make a living. Hopefully Google won’t scoop this up as well.